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natural monopoly

Fred Campbell’s latest article in Forbes explains why forcing phony competition on fiber investments will only slow the deployment of fiber Internet to businesses and put our global competitiveness at risk. The complete article is available HERE.

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Don’t believe it when the Federal Communications Commission (FCC) says it wants to regulate wholesale access to business fiber connections in order to promote “competition.” The FCC’s plan to impose monopoly regulation on new fiber deployments to businesses indicates the agency has forgotten what “competition” actually means. The plan makes sense only if the word “competition” is replaced by “monopoly.”

Consider this example from a post on the official FCC blog: “Traditional copper network infrastructure has also been a mainstay of competitive (read: monopoly) service purchased wholesale from the incumbent telcos by competitive providers and retailed to businesses, schools, health-care facilities, and other small- and medium-sized institutions.” Read More

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It’s The Day After the court ruled that the Federal Communications Commission (FCC) cannot treat Internet service providers (ISPs) as common carriers and the Internet is still working. The largest ISPs have already committed to maintaining an open Internet despite the court’s ruling, and there is no reason to believe that will change any time soon. The Internet is not – I repeat, is not – in imminent danger. It is safe to leave the bomb shelter.

Don’t believe the doomsayers who claim the ruling leaves consumers with no protection from ISPs. They are wrong. In the unlikely event that Internet openness is seriously threatened, the government retains authority to intervene. Although the FCC cannot impose common carrier regulations on ISPs, the court held that the FCC has “authority to promote broadband deployment by regulating how broadband providers treat edge providers.” And, to the extent the FCC lacks authority to prevent anticompetitive, deceptive, or unfair practices by ISPs, the Federal Trade Commission (FTC) has such authority. Read More

Today marks the seventeenth birthday of the Telecommunications Act of 1996. Since it became law nearly two decades ago, the 1996 Act has largely succeeded in meeting its principal goals. Ironically, its success is becoming its potential failure.

By the time most teenagers turn seventeen, they have already begun planning their future after high school. Their primary school achievements are only a beginning in a lifetime of future possibilities. For most legislation, however, there is no future after the initial goals of Congress are achieved. Fortunately, the seventeen year-old 1996 Act isn’t like most legislation.

I had an interesting Twitter exchange yesterday with Sam Gustin, a reporter at TIME focused on business, technology, and public policy. He published a favorable article on Susan Crawford’s new book, Captive Audience, which argues that cable companies control the Internet and as a result the U.S. is no longer the global leader in broadband. I saw a link to the article in this tweet by Tim Karr:Read More

“Given the rate at which telephone companies are losing customers when they cannot raise prices as a regulatory matter, it is preposterous to continue presuming that they could raise prices as an economic matter.”

Today, the United States Telecom Association (USTA) asked the Federal Communications Commission (FCC) to declare that incumbent telephone companies are no longer monopolies. Ten years ago, when most households had “plain old telephone service,” this request would have seemed preposterous. Today, when only one in three homes have a phone line, it is merely stating the obvious: Switched telephone service has no market power at all.

If the FCC stops moving forward on Internet transformation, the universal service and intercarrier compensation reform order will become a death warrant for telephone companies.

CLIP hosted an event earlier this month to discuss Internet transformation. What is Internet transformation? In a recent op-ed, FCC Commissioner Ajit Pai noted that it “is really two different things—a technology revolution and a regulatory transition.” Read More